RvdK: Effectively that’s two questions. Let’s start with the second one first. The AdECN brand name has been retired, so you won’t see the name reappear in market. Of course, there’s technology that we developed for AdECN that is being re-purposed in our broader exchange offering, called the Microsoft Advertising Exchange.

Your first question is about our overall exchange strategy. To start off, Microsoft is fully committed to the Exchange space. Our desire to accelerate our Exchange offering was one of the primary drivers behind our partnership with AppNexus last fall. The update here is that we’re nearing completion on the transition to the AppNexus RTB infrastructure, which is a part of the technology for Microsoft Advertising Exchange. We are in the middle of roll-out, and will see the US and other markets lighting up this year. We aim to continue to build value and functionality onto the platform and will start to have all of our owned-and-operated, unreserved inventory flow through our Exchange soon. In short, we’re excited about the traction we expect to make in the coming months with our offering in the marketplace.

How do AppNexus technology and services enable Microsoft?

AppNexus is an excellent platform solutions partner for us and is the part of our Exchange that provides customers with RTB access to our inventory. Our partnership with AppNexus helped satisfy our customers' "need for speed" and will enable us to scale rapidly into the Exchange marketplace. Microsoft will also be developing other yield and marketplace management features in the future. Of course, we will be making decisions around the inventory flowing through our Exchange and continue to have a direct relationship with demand partners in the future.

Does ad serving - whether for the publisher or advertiser - continue to represent an opportunity for innovation at Microsoft?

Both the buy-side and sell-side ad-serving solutions are morphing from disconnected transactional services into key components of value creation that span all digital media. We are approaching this opportunity with the belief that openness and partnership can move the industry farther forward, and more quickly, than if we see this as something that we need to own in its entirety. With that in mind, we’ll seek out partners to build atop our core ad serving platform where appropriate.

In other places, we will continue to invest in our own platforms. For example, within the Atlas Media Console, we’re pushing hard to deliver features that drive higher ROI as well as deliver deeper and more actionable analytics for agencies and marketers. For Atlas customers, this means expanded creative optimization capabilities – including capabilities that were formerly only available on our media properties – via our new Audience Messaging platform. It also means an expansion of our Advanced Analytics Pack as well as the launch of Atlas+, which is an industrial-strength business intelligence platform that combines the insights of Atlas data with market-leading analytics and collaboration products from Microsoft (like SharePoint and Office).

Along those lines, is Microsoft thinking about solutions for publisher yield optimization both on the guaranteed side and non- guaranteed sides of the display ad business for publishers?

A lot of companies are making noise about integrating yield optimization across these two types of inventory. It’s a challenging problem, and we’re intrigued by the value that can be created if we unlock this complexity, not just for ourselves as a major publisher in the ecosystem, but the industry as a whole would benefit if we can extend that to other publishers. Any solution we bring to market (whether ourselves or via partners) should serve the needs of big publishers who care not only about yield, but about maintaining a superior customer experience and minimizing channel conflict

What do you see as the next breakout digital marketing channel, if you will? Or is the convergence of marketing channels next?

It’s difficult to predict a single, specific channel as a “breakout” candidate, because they’re all moving at warp speed with varying degrees of adoption, utility and value. A different way of looking at this would be to look at customer scenarios that are emerging with more and more frequency, namely that advertisers are looking at ways to more easily connect and enable their stories across offline and online channels (e.g. brand advertising that spans TV/video, display and mobile), and that is supported and measured by clear metrics. Another area that we think has tremendous potential is search and display working in tandem as a vehicle for “task completion” that connects online advertising with real-world consumption.

Microsoft's Atlas had been focused on something called "engagement mapping" as a solution for attribution. Do you think a solution for attribution is possible?

It has to be. We pioneered Engagement Mapping because we felt that the “last ad clicked” model was inherently flawed. The industry agreed. The first generation of Engagement Mapping was against display and search, but multichannel optimization is going become a critical part of the next generation of buying platforms and you’re starting to see players move in this direction. Effective attribution modeling is a problem in need of a solution if our industry is to reach its full potential. It affects everyone, which is why we continue to explore new ways of evolving Engagement Mapping to help advertisers and publishers fully understand all the touch-points in the digital purchase funnel.

Do you see the evolving data management platform (DMP) model becoming increasingly important to Microsoft strategy?

DMP as a technology is important for a variety of applications in our industry, and the buy side platform is one obvious place where that should happen. In fact, we look at Atlas as a hub of digital advertising data collection, management and analytics. Combining audience assets (across channels), creating value from the data (vs. just managing it) and helping advertisers and publishers maximize the value from their data through tools offerings (vs. under-monetizing it) are all important when you look at the DMP model. Let’s also not forget the increasing call for users to have more control over the data they generate, which is fueling the importance of data management; this may be the biggest reason of all for the industry to get behind DMP models that are both transparent and effective for advertisers and publishers.

1 Comment

in regards to the yield optimization of a publishers inventory: the industry will benefit if the CPM of the inventory is directly related to the quality of the eyeball, whether contextual or data driven (=transparency). But, while we try to find reasons to increase the value of low-demand inventory, ultimately the risk is that the huge direct deals might realize they are paying too much for the 'high-end' inventory - and shouldn't we be worried when there's much more money on the top end than on the bottom...? yield optimization and transparency could ultimately bring the top down, as well as the bottom up.